• LendX Financial

Power of Sale: Four Facts You Must Know

Congratulations on securing a mortgage for your new home! The next step is to ensure that you keep paying up your loan on a timely basis. Let's get it straight - If you default on your mortgage you stand the risk of losing your home. The lender gets protection to retrieve their money in case of a default by way of Power of Sale. In other words, the power of sale gives the lender a right to sell the home in case you default.

Difference between Foreclosure and Power of Sale

Power of sale comes in the form of a clause in the mortgage deed. The term 'Foreclosure' is sometimes used in lieu of power of sale as they are quite similar. But as a borrower, you need to know the difference between the two. Foreclosure allows the lender to take over your home premises, own it, and later sell. Power of sale on the other hand gives him the right to sell the property but also calls for him to sell it at the maximum possible price so as to pay off the remaining loan and arrears. If after all this, there is any money still left, you, the homeowner are entitled to that money as the title deed of the home is still in your name.

Execution of Power of Sale

If you default, and the lender plans to execute the power of sale, he must first send a letter to you which states that the mortgage must be updated by a certain specified time, failing which the power of sale will be executed. Power of sale is usually the first step before getting on to the foreclosure state, especially in the provinces of Ontario, PEI, New Brunswick, and Newfoundland.

How To Deal With Power of Sale as a Borrower

In case you have defaulted on your mortgage payments and a power of sale has been initiated you have some remedies. Lenders don't have it easy when it comes to the execution of power of sale, so they are generally willing to adopt a middle path and negotiate. So in case of a default ask your lender about the alternatives to avoid execution of power of sale as well as to bring the mortgage payments up-to-date along with tax arrears. You could alternatively consider getting a mortgage from a different lender to pay off the mortgage to which the power of sale has been initiated.

What Is In Store For Buyers of a property attached to Power of Sale?

If you are a buyer shopping around for deals and come across a power of sale property you may think of it as a discounted option. But you must know that the lenders are obliged to get market value for such properties. Another downside is that any issues with power of sale properties cannot be redressed by the seller i.e. the lender. Neither does the lender assure you about the current shape of the property as he is not the owner but merely a seller remedying his cause. So it is your duty as a buyer to ensure what you are queuing up for.

Lastly, if you have any questions related to power of sale, we will be happy to help.

4 views0 comments

Featured On


Our Clients Say Great Things About Us


Extremely knowledgeable and professional. Great service and on top of their game. Overall great experience and exceeded my expectations! Highly recommended!


Great job and thank you to the Lendx team... getting the right mortage for our first home.Highly recommended for first time buyers.


I had a very good experience with them regarding my mortgage. They are very professional and have in-depth knowledge. They gave me the right advice and promptly communicated to me all the way during my mortgage approval. I would highly recommend them.

LendX Financial
Broker License # 13090


2 County Ct Blvd, Unit 333
Brampton, ON L6W 3X7


  • LendX Financial Facebook
  • White Instagram Icon
  • LendX Financial LinkedIn

© 2020 by LendX Financial